Setting up a Care HomePublished on 25th March 2019 2019-03-25T12:35:56+00:00
The sad news that none of us is getting younger comes with a silver lining. We are as a nation all living longer. Better medical care means that life expectancy has increased by around 20 years since the 1960s, and many more of us can expect to see our 90th birthday.
But of course, not all of us can expect to still be hale and hearty at that age. The ageing population of the UK means booming business for the care home industry, which is already worth around £16billion each year.
It could mean a rewarding business opportunity for you – although running a care home is as much a vocation as a business. Looking after people at the end of their lives requires compassion and a genuine desire to enhance the lives of your residents as well as a professional approach.
It also means compliance with rigorous regulations. In England, the Care Quality Commission (CQC) acts as the independent regulator to ensure quality and safety standards and similar bodies exist in Scotland and Wales.
The CQC regulations include the requirement to employ qualified staff and for the premises to meet stringent health and safety standards. It inspects care homes and may put homes that fail to meet the necessary care standard into special measures, or even have them struck off the register altogether.
Of course, meeting standards makes good business sense. Providing a high standard of care will help ensure your home enjoys full occupancy and helps you maximise profits.
At Rangewell we work with care homes across the UK. It means we know the challenges you face if you want to set up a home the financial solutions to them.
“I’ve been a geriatric nurse for most of my career. Setting up a Care Home looked like a dream, but when I spoke to Rangewell, I found that there were funding solutions that I could use.”
Set up a new Care Home
To be profitable you will need a minimum of 25 residents. Unless you already have suitable property, your primary consideration might be finding a large enough building. Remember, you will need planning permission from the local authority to turn a private residence into a care home.
A countryside location with spectacular views might be possible if you are serving wealthy residents, but the most suitable location may be in a town, where relatives can use public transport to get there - these are practical considerations to think about. Relatives will be elderly themselves and may need public transport, as may staff.
When you find the property you need, a Commercial Mortgage could help you spread the cost of buying it over 20 years or more.
“I found the ideal property - it was actually a guest house close to the front in our seaside town. It had plenty of rooms and it meant that the cost of conversion was cut down.”
Equipping your Care Home
Some residents may bring their own furniture but if you provide nursing care, you will be faced with a long list of medical equipment, from beds and wheelchairs to hoists. You will need to fit out a kitchen capable of producing large numbers of meals and probably a commercial washer dryer.
Asset Finance lets you spread the cost of the equipment - or assets - you need with Hire Purchase or even leasing. HP agreements generally last between 12 and 72 months and require a 10-20% deposit while leasing can bring in equipment with no upfront costs.
“We needed to fit out the dayrooms as well as provide things for the kitchen and equipment for cleaning - the list seemed to get longer every time we looked at it. But it wasn’t a problem, because we could spread all the costs.”
Cashflow Finance for your Care Home
“It’s no good simply saying you are running a care home. If you don’t have residents, you don’t have a business. And, of course, they don’t all come in at once. It took six months before we had anything like enough people just to cover the bills.”
The first few months of any business are likely to be slow and, when you have a care home, you have to expect that it will take time before you have all the residents you need. You need a source of working capital to cover the costs until your home is generating enough income to cover them itself. Cashflow support or Working Capital Finance can provide short-term cash to help you launch your business - and help it stay afloat.
At Rangewell, we aim to find the most competitive deal for all types of finance, including the answers when you are starting up a care home business. So if you’re looking for a way to support your plans, find out more about what we can do for you.
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